Create Credit Manager

1

Name

Name can reflect the properties of collaterals and position size:

• Volatile/ Correlated

• Blue-chip/ Experimental

• Small/ Medium/ Big (depending on account debt limit)

Simple notation is calling naming it with tiers: Tier 1; Tier 2; Tier 3 Higher tier means larger positions and safer collaterals.

2

Interest Fee

% of borrowing interest taken by DAO and Curator Default fee split is 50/50 between DAO and Curator

Interest fee of a Credit Manager can’t be changed after it’s deployed.

Curator's fee is added on top of interest paid by borrower. If the IRM + collateral-specific rate is 5% and the fee is 20% of the interest, then borrowers pay 6%.

Interest fee & Credit Manager's debt limit can be used to bootstrap Market utilization.

e.g. Create Credit Manager with limit of 5,000,000 USD and Interest Fee of 0% can be created to incentivize first borrowers as they will get more favorable borrow rates.

3

Liquidation Premium & Fee

• Premium - % of liquidated collateral taken by liquidator

Liquidation premium & fee of a credit manager can’t be modified after it’s deployed.

• Fee - % of liquidated collateral taken by DAO and Curator

It’s not recommended to set liquidation fee to be lower than 0.01%. If the fee is set to 0, then account that fully consists of leveraged underlying token will create bad debt upon liquidation.

There is no impact of liquidation fee on the safety of liquidations (it doesn't increase or decrease probability of succesfull liquidations with profit).

Borrower loses Liquidation Premium + Liquidation Fee from liquidation collateral.

Expired liquidation premium and fee are useful only if Credit Manager is expirable, which is a rare case, so you can freely omit that parameters. If set, "Expired" versions of liquidation premium and fee are applied after Credit Manager expiration.

4

Minimum debt, Maximum debt, Max. enabled tokens

• Minimum & Maximum debt - Credit account created in this Credit Manager can't have debt less than minimum and more than maximum.

• Max. enabled tokens - maximal amount of different tokens that can be counted towards account value (used as cross-collateral margin).

maxDebt/minDebt <= 100/max enabled tokens &#xNAN;Example: If max enabled tokens = 4 and minimum debt = 10k USDC, maximum debt can't be larger than 250k USDC.

5

Whitelist policy, Expiration

Whitelist - Allow borrowing only to owners of particular NFT.

Expiration - Credit Manager can be shut down following specified schedule. May be useful for time-sensitive types of collaterals.

6

Total Debt Limit

Maximal sum debt on all credit accounts created in this Credit Manager.

Interest fee & Credit Manager's debt limit can be used to bootstrap Market utilization.

e.g. Create Credit Manager with limit of 5,000,000 USD and Interest Fee of 0% can be created to incentivize first borrowers as they will get more favorable borrow rates.